Under the best of circumstances, overseeing the Department of Health and Human Services is an enormous undertaking. With 65,000 employees and a budget of $707.7 billion, it accounts for nearly one-quarter of all federal spending, second only to the Defense Department.

But in the Obama administration the job is taking on a second, perhaps more daunting, responsibility: shepherding health-care reform legislation through Congress.

Unlike his predecessors, Thomas A. Daschle, President-elect Barack Obama’s choice for HHS secretary, will be given an expanded role, leading administration efforts to overhaul the U.S. health system.

“This really creates a new type of secretary,” said Charles N. “Chip” Kahn III, president of the Federation of American Hospitals. In the past, “HHS was more or less a service organization to the White House,” while White House advisers drove policy initiatives.

In broad terms, Obama campaigned on the idea of reducing medical costs, improving quality and eventually achieving universal insurance coverage. He promised to cover every child and to reduce the average family’s medical bill by $2,500 a year. He advocated a greater emphasis on prevention and expanding participation in the government-subsidized Medicare and Medicaid programs.

“There are two aspects to the challenge of pushing for health reform,” said Dan Mendelson, a budget and health adviser in the Clinton administration. “One is to get the right concepts together with what Congress wants to do, and the other is managing the disparate concepts and generous egos.”

A serious restructuring of the health system will require extensive data and analytic capabilities to dissect the proposed changes and the impact they might have, said Karen Davis, president of the Commonwealth Fund, a private, nonpartisan research foundation. “Right now, there’s nothing other than the Office of the Actuary to do back-of-the-envelope estimates,” she said.

With the expectation that Daschle, a former Senate majority leader, will focus heavily on crafting and pushing legislation, there will be an even greater need for a strong No. 2. HHS is a collection of 11 agencies including the Food and Drug Administration, the National Institutes of Health, the Centers for Medicare and Medicaid Services, and the Centers for Disease Control and Prevention.

“He’ll need to have deputies who are well-versed in the agency as a whole and who can manage the ongoing operation of HHS while he leads the health reform discussions,” said Len Nichols, director of health policy at the New America Foundation. One of those will likely be Jeanne Lambrew, a veteran of the Clinton administration and a co-author of Daschle’s book “Critical: What We Can Do About the Health-Care Crisis.”

Lambrew, in a chapter of a book published by the liberal Center for American Progress outlining a proposed agenda for the incoming president, agreed that fixing the health system is a top priority. However, she noted, “these urgent problems overshadow persistent, neglected and potentially deadly infrastructure gaps in the system.”

According to her assessment, the nation’s ability to respond to natural or man-made crises is weak, as evidenced by the poor response to Hurricane Katrina. Chronic illnesses such as diabetes have been given short shrift, and little has been done to prepare for the long-term health needs of an aging population.

The Commonwealth Fund, after interviewing two dozen health leaders, issued its own set of recommendations. It urged the next administration to make a “real focus on what it takes to improve health outcomes,” as opposed to secondary issues related to insurance markets, Davis said. That means tackling childhood obesity, racial disparities and preventable illnesses.

The Vatican has fired a warning shot over the bows of Barack Obama in response to the President-elect’s intention to lift the US ban on embryonic stem cell research.

Cardinal Javier Lozano Barragan of Mexico, who acts as the Vatican health minister, said that stem cells taken from human embryos and involving the destruction of the embryos “serve no purpose”.

Asked whether the Vatican was concerned about reports that Mr Obama might reverse the Bush Administration’s ban, the cardinal said that embryonic stem cell research had not resulted in any significant health cure so far and was “good for nothing”.

Research on adult stem cells and umbliical cords had been shown to have “positive value”, by contrast, although even that was not “a panacea for everything.”

He said the Vatican would seek clarification of the new administration’s position on stem cells, and he himself was not “fully aware” what it was.

Aides to Mr Obama indicated this week that he will reverse Mr Bush’s stand on stem cell research. The US Senate voted in July to remove restrictions on embryonic stem cell research, but the President vetoed the legislation the following day.

Mr Obama has supported stem cell research to find cures for diseases such as Alzheimer’s. His views are supported by Joe Biden, the Vice-President-elect, who is a Roman Catholic.

John Podesta, who is handling the President-elect’s preparations to take over in the White House on January 20, said Mr Obama wanted “all the Bush executive orders reviewed”.

He added: “I think across the board, on stem cell research, on a number of areas, you see the Bush administration even today moving aggressively to do things that I think are probably not in the interest of the country.”

Writing in the National Catholic Reporter, John Allen, a leading American Vatican watcher, said the Vatican would have “deep differences” with the Obama administration over abortion and embryonic stem cell research.

These, however, must not be allowed to impede US-Vatican co-operation in promoting “religious freedom and human dignity worldwide” or on issues such as immigration, economic justice, peace, and environmental protection, he said.

Carinal Barragan, President of the Pontifical Council for the Pastoral Care of Health Care Workers, made the remarks at a press conference on childhood disease and illness and infant mortality.

He called for an intensive effort to improve “both medical and pastoral” aid to children, saying that four million babies in the world died each year in their first 26 days of life.